October 11, 2021 4:40:50 pm
By Shilpa Menon
While the pandemic has affected economies globally, Capgemini’s World Wealth Report 2021 demonstrated that High Net Worth Individuals (HNWIs) across the world have only mushroomed, growing more than 6.3 per cent in 2020. In India, skyrocketing digital start-up valuations as well as foreign investments raised this number by almost 5.9 per cent from the previous year, even outpacing the overall growth in the Asia-Pacific region.
According to the third edition of the Global Wealth Migration Review published by AfrAsia Bank in 2020, a more global outlook adopted by families, and the financial and mobility concerns amid a pandemic caused an increase in migration of HNWIs from countries like China and India. While Australia and the United States of America took in most of the inflow, the top destinations witnessing an influx of HNWIs also included a number of European countries, driven in part by immigrant investor programs offered by these countries.
Within the European region, Portugal has emerged as a favourite destination for HNWIs looking for alternative residency options. Factors like safety, educational opportunities, robust healthcare systems, and a high standard of living, in general, are some of the prime factors that influence these decisions. Not only does Portugal have an excellent system of education, with some of the top European universities involved in research and theoretical studies, they’ve also fully integrated into the European Higher Education Area through the Bologna Process since 2006.
The Serviço Nacional de Saúde (SNS) in Portugal also provides for a universal system of free healthcare to citizens and permanent residents in the country. The 2021 Global Peace Index (GPI) report produced by the Institute for Economics & Peace (IEP) ranks Portugal as the fourth most peaceful country in the world.
Portugal also has a rich and ancient history evident in its ornate architecture, and an extremely hospitable Mediterranean climate with famously scenic beaches. All of these factors, coupled with its investor visa program, have caused Portugal to attract a steady influx of HNWIs from across the world. Only last year, the number of Golden Visas issued to Indians by Portugal saw an unprecedented 87 per cent increase, from 33 in 2019 to 62 in 2020.
The country’s investor visa, also known as Autorização de Residência para Investimento (ARI) or the Golden Visa, was created in 2012 in order to boost investment in the Portuguese economy. While Golden Visas were already in place in many parts of the world, including the UK, countries like Portugal that were trying to recover from the European Debt Crisis offered attractive options at lower price tags, leading to an unprecedented rush of investment in the region. Since the inception of the ARI program, it has gathered over €5.8 billion in investments, with most of it being directed towards the real estate market. More than 9,500 investors along with more than 16,000 family members have availed of residency and visa benefits from the program.
The ARI visa provides one of the fastest residency options (inside of a year) to investors through investment sums starting at €280,000. The visa allows you to live and work in Portugal, as well as visa-free travel across the entire Schengen Area comprising 26 European nations. You also have the option to apply for Portuguese citizenship after five years of investment in the program, one that gives you access to a Portuguese passport, ranked the third strongest in the world according to the Global Passport Power Rank 2021.
Perhaps the best part about the visa is that it only requires you to stay for a minimum of seven days annually on average in the country. As a non-habitual resident of Portugal, you even have the opportunity to gain tax exemption on certain sources of income for as many as 10 years.
The Golden Visa program opens doors to several investment opportunities in Portugal. For example, you can directly own real estate in Portugal by investing a minimum of €500,000 (in urban areas), or invest €280,000 to rehabilitate an older property in rural areas. Portugal was chosen the ‘Leading Destination in Europe’ by the 2020 World Travel Awards for the fourth year in a row and has some of the most scenic destinations along the Atlantic coastline, a factor that has contributed to the real estate market growing more than 86 per cent in the previous decade.
The newest route is a fund investment route, where one can invest €350,000 in a private market, close-ended PE/VC/RE fund. This route is fast becoming popular with investors, owing to its hassle-free construct and compelling return profile.
The Portugal Golden Visa requires one to select and invest in a project/asset that qualifies under the visa regulations even before filing for the application. There is a requirement to open up a bank account in Portugal with a NIF (Número de Identificação Fiscal) tax ID. Thereafter, documents (including proof of investment in the chosen asset/project) are to be submitted online to the Portuguese Immigration and Borders Service SEF (Serviço de Estrangeiros e Fronteiras) and an interview is scheduled with them before the Golden Visa is approved.
The process itself requires careful consideration and a certain amount of prudence and planning in order to be smooth sailing. Investors can ensure this by working with advisory firms that specialise in immigrant investor programs. Appointing a Portuguese law firm that is well versed in the Golden Visa process is also crucial.
With the investment requirements for certain modalities under Portugal’s Golden Visa program set to increase in January 2022, the number of families lining up for an alternative residence in this European Eden is expected to burgeon over the next 2-3 months.
(The writer is senior director, India, LCR Capital)
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines
- The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.